Concerns over government liabilities resurfaced this week as the peso edged closer to the 60-per-dollar mark, a level Malacañang said the President hopes to avoid amid mounting exchange-rate pressures.
Palace Press Officer Undersecretary Claire Castro said a weaker currency would automatically inflate the country’s debt burden because foreign obligations become costlier when converted into pesos. “Kapag tumaas ng P60, bumaba yung value ng peso, definitely mag-i-increase yung debt natin. Because yung palitan, tataas,” Castro said during a briefing.
She added that President Ferdinand “Bongbong” Marcos Jr. does not want the exchange rate to reach that level and is awaiting discussions within the Bangko Sentral ng Pilipinas (BSP) on how to address the situation. “Ayaw po sana, ayaw po ng Pangulo na umabot pa ito sa P60 na palitan so abangan natin kung ano yung mapag-uusapan ng BSP patungkol dun,” she said.
The peso closed at P59.46 against the US dollar on January 15, slipping past its previous record low of P59.44 logged a day earlier.
Rizal Commercial Banking Corp. chief economist Michael Ricafort attributed the currency’s weakness to market expectations of a possible 25-basis-point policy rate cut by the BSP. He noted that the peso’s stay at the “59 levels” for more than two and a half months since late October 2025 “could signal forex intervention to smoothen any volatility.”
Exchange rate movements are shaped by a mix of local and global factors. On the domestic side, inflation trends, trade imbalances, remittance flows, and BSP policy decisions weigh on the peso, while overseas influences include US Federal Reserve actions, oil prices, and broader investor sentiment.
While a softer peso poses risks, it also brings advantages to sectors that earn in foreign currency. Overseas Filipino workers and their families receive more pesos for every dollar remitted, supporting household spending and domestic consumption, while freelancers, exporters, and business process outsourcing firms similarly benefit from dollar-based earnings.
At the same time, currency weakness raises the cost of imported goods and services, increasing expenses for materials sourced abroad and potentially adding pressure on inflation, which reduces the peso’s purchasing power for local consumers.
